Cars

Buffett says BYD investment is 'right choice'

(Xinhua)
Updated: 2010-09-28 11:15

SHENZHEN - Billionaire investor Warren Buffett reaffirmed his support in Chinese electric carmaker BYD Auto here Monday after media reports suggested he might reduce his stake in the company.

Warren Buffett delivers a speech in an event hosted by BYD, the fast growing Chinese electric car producer he has invested in, in Shenzhen, South China's Guangdong province, on Sept 27, 2010. Billionaire investor Warren Buffet began a three-and-half-day visit to China on Monday, in which he will take part in a series of marketing events of BYD and visit BYD's new energy research center, Xinhua learnt from a schedule obtained from Shenzhen-based BYD. [Photo/Xinhua]

"BYD is the right choice for me," he said while speaking to nearly a thousand BYD car dealers at the dealers annual meeting in China's boom town of Shenzhen.

Buffett described the company as "a young and promising company experiencing dynamic growth" and "a leader in innovation and technology".

Buffett's visit came amid market rumors suggesting he might reduce his stake in the Chinese carmaker after his investment in BYD has risen six-fold.

Buffett's Berkshire Hathaway group bought 10 percent of Hong Kong-listed BYD (short for "Build Your Dreams") for $230 million tow years ago. That stake is now worth as much as $1.7 billion.

Reuters on Sept 24 quoted Andrew To, sales director at Tai Fook Securities, as saying Buffett might break the news he plans to sell down his stake in the company during his visit, since the company's stock value is well off its peak of last October and the returns on his investment are impressive enough.

However, BYD issued a statement Saturday saying reports on Buffett's possible stake reduction were not true.

Buffett said he was honored to be in BYD to celebrate its production of the one millionth car, and he would "come back for the 10 millionth car".

Energy deals mark 'new era' Related readings:  Buffett visits China's clean energy automaker BYD  BYD's E6 used as taxis in Shenzhen  BYD denies speculation of Buffett's stake sale  BYD to buy into Tibet lithium producer

Established in 1995, BYD sold more than 400,000 vehicles in 2009, sustaining a 100-percent growth rate for the fifth straight year.

Further, it reported a more-than-50-percent rise in sales revenue and profits in the first half of this year.

The Shenzhen based battery-turned-auto maker is not only pioneering China's electric car industry, but also does research and development on solar energy. The company's development strategy matches Buffett's investment tastes.

Buffett said he was "totally amazed" in a test drive on BYD's pure electric E6 model with Bill Gates last May, which now serves as taxis in Shenzhen.

The E6's smooth performance in Shenzhen had "heightened BYD's spirit of green technology and vehicle development," Buffett said.

"I truly believe that BYD will play a leading role in the future," he added.

Buffett attended a number of events on Monday, including a ceremony to celebrate BYD's signing of a deal to build electric charging stations with China Southern Power Grid.